Martin Fowlie discusses how the oil and gas industry is moving towards increased standardisation of quality control and assurance processes
In today’s oil and gas industry, businesses are facing increasing regulatory, economic, operational and technical challenges that are becoming ever more complex. At the same time, stakeholders are demanding more accountability and transparency from them.
To increase confidence in quality assurance and efficiency, as well as ensuring projects meet schedule and budget targets, the industry must look to enhanced standardisation to streamline its services, technologies and even its terminology. It’s a concept that is currently receiving greater attention and interest.
Although the subsea industry is still maturing, the shipping industry already has a long tradition with standardisation in globalised supply chains as well as standardised quality assurance (QA) regimes. As these two industries are often sharing the same supply chains, the logic in looking to the maritime industry for a model may seem attractive.
The subsea industry has long been challenged by high cost levels and complexity coupled with low predictability of quality control requirements throughout the supply chain. This has been compounded further by volatile oil prices. Industry players agree that the root cause lies in highly variable requirements by operators from field-to-field, and that QA processes are customised on a project-specific basis. The technical, logistical and commercial complexity of operating in such a manner makes it a challenge to build profitable business cases for subsea greenfields and brownfields.
With the oil and gas industry looking at greater remote development prospects and the development of more marginal discoveries, the focus on more efficient and cost-effective development processes, without sacrificing quality or safety, becomes increasingly dominant.
Moving from complex and disjointed processes and workflows to those that deliver a more unified approach across the board will enable a far more simplified and efficient deployment of quality control plans for individual projects. This will give manufacturers predictability and confidence in the requirements and specifications at hand, which in turn will reduce exposure to quality issues.
Such a move will secure quality throughout a globalised supply chain by the use of prescriptive routines for inspection and surveillance services. This will enable strategic stocking of long-lead items, even when manufacturing takes place in new regions. Short lead-time is considered an important enabler for development of marginal fields and will cater for predictable interfaces between vendor and buyer throughout the whole supply chain.
The motivation for such an evolution of the subsea industry comes from the need to avoid unnecessary work and rework, particularly at the design stage, and to create a platform where competition can take place on equal terms. Improvements in efficiency and effectiveness can also be gained by minimising unnecessary (and often last minute) add-ons, which do not contribute to function or quality. This should not restrict innovation.
Creating standardisation through collaboration
When managing the integrity of subsea production systems, for instance, a lack of transparent and uniform information management and documentation systems is a particular challenge across the sector. Organisational interfaces can also hinder clear communication and exchange of operational data across operators’ organisations. To provide guidance on how to establish, implement and maintain a cohesive integrity management system, DNV GL published a recommended practice (RP) in December, 2014.
DNV GL-RP-0002 is a result of a two-year joint industry project (JIP) and aims to help operators conduct maintenance activities at the most cost-effective intervals, by increasing confidence in the condition of the subsea equipment, whatever the age and condition, while ensuring a unified and reliable reference for both authorities and the industry.
Likewise, the company’s ‘Standard for certification of subsea equipment and components’ (DNV GL–SE-0045), aims to streamline quality and manufacturing processes. For operators, it will reduce costs without sacrificing quality, innovation or safety, and subsequently shorten lead-times. For suppliers, it will increase predictability and enable strategic stocking of long-lead items.
Some subsea operators are addressing standardisation mainly in terms of identical parts and inter-changeability, but it is clear that benefits can be gained from standardised quality assurance processes such as Offshore Classification standards.
DNV GL has a number of JIPs underway to regulate and streamline efficiency issues in the subsea industry. These include a collaborative project to present a minimum unified set of documentation requirements for all major subsea components. In the subsea industry for instance, a typical project can involve more than 10,000 documents (with up to 80,000 in a complex project) over a lifecycle of 30 years.
A DNV GL-led JIP involving 20 industry players has made a major step forward in addressing the time-consuming, complex and costly issue of subsea documentation, with the first issue of a RP. This is an important element in the company’s wider drive to streamline the global subsea sector and to increase efficiency, predictability and assure quality.
Dialogue is now underway with oil majors to build an even broader international network collaborating and capitalising on the joint work. Statoil is one of the first international E&P companies to implement the new standard, which will be adopted for new projects including development of the Johan Sverdrup field.
The next phase of the JIP is now to extend the current scope of subsea production systems (SPS) to also include subsea, umbilicals, risers and flowlines (SURF) and to further address documentation requirements between contractors and suppliers.
DNV GL has also launched a new RP (DNVGL-RP-0034) to address common specifications on steel forgings for subsea application. This will enable reduced lead-times, enhanced stock-keeping, interchangeability of forgings and help to improve and maintain consistent quality.
High priority initiatives
The standardisation of steel forgings was targeted as a high priority initiative in a report issued by the Norwegian Oil and Gas Association in 2014 and also highlighted by the Society of Petroleum Engineers. The RP has been developed through a JIP involving 21 companies, representing steel manufacturers, subsea contractors and oil and gas companies. It contains requirements for qualification, manufacturing and testing, and complements existing industry codes for subsea equipment.
The subsea sector is reportedly set to quadruple in size, with projected annual revenues of £85bn by 2020. According to some outlook reports, within 20 years, subsea production will be on par with traditional oil and gas production offshore. Looking even further ahead, it is anticipated that subsea will surpass traditional platforms in terms of production.
These predictions are aligned with increasing complexity due to the progression towards deeper, colder, more remote and environmentally sensitive areas. The realisation of subsea processing and compression is also presenting its own unique challenges.
Standardisation will be important to secure a strong and coordinated approach to the supplier industry to achieve the goal of more profitable subsea developments. In this era of rising costs and unpredictable oil prices, the move from tailor-made to more of a ‘one size fits all’ approach will suit the industry’s drive to tighten belts.
Martin Fowlie is DNV GL’s head of section Subsea Technology.